Risk Premia Have to 'Go Up Further,' BofA's Raedler Says

A Bank of America strategist warns current risk premia—at 20-year lows—are "inappropriate" amid escalating geopolitical tensions, signaling potential market instability ahead. Weakness in the US labor market and mounting credit pressures further justify higher risk premia, according to the analysis, suggesting investors may be underpricing systemic risks. Banks, semiconductors, and mining sectors face heightened vulnerability if risk premia rise, with benchmarks likely to reflect increased downward pressure under such conditions. The remarks were made during a March 2026 Bloomberg Television interview, emphasizing the urgency for investors to reassess equity valuations in volatile macroeconomic environments. The warning underscores broader concerns about misaligned market expectations, particularly in sectors sensitive to credit conditions and global supply chain disruptions.